Tnc Case Study

1880 Words 8 Pages
Register to read the introduction… A transnational corporation (Multinational Corporation) TNC is a corporation or enterprise that manages production establishments or delivers services in at least two countries such as Coca Cola and Nike. Very large multinationals have budgets that exceed those of many countries. Multinational corporations can have a powerful influence in international relations and local economies and play an important role in globalisation. I feel that the economy is the most significant motivating force behind globalisation, although politics, technology, education, media, and culture also play their parts. The effect on human life is certain. Global institutions like the United Nations (UN), World Bank and International Monetary Fund (IMF) and individual countries and societies derive their strength from their economic power, which enables them to make or influence decision-making on the world stage. Behind the government, wealthy individuals or groups in the developed countries exert influence on decision-making, both within their own countries and at the global level, on issues ranging from politics, conflicts and wars to development in the social sectors, such as education and health services. Among the largest 100 economies in the world, 51 are TNCs, whereas only 49 are countries. It is also important to note that out of the 200 largest economies of the world, 144 are TNCs. The combined sales of the top 200 corporations are bigger than the combined economies of all the countries of the world, minus the largest 10. The study has found that the growth of sales of top 200 corporations is faster than overall global economic activity. Between 1983 and 1999, their profits grew by 362 percent whereas their combined sales grew from 25 percent …show more content…
It establishes and maintains economic, political and socio-cultural relations. This interaction helps economies through growth in international trade, investment and capital flows. Some factors that have acted as the driving force of globalisation include technological innovation as it had made transport and communication around the world easier, capitalism and trade have also played an important role in encouraging globalisation. Trade between countries in the developed world and the developing world has specifically been the biggest driving force of globalisation. With the Industrial Revolution and the introduction of fast means of communication and transportation, transnational trade has expanded at great speed. Subsequently, the TNCs have emerged. Recently the emergence of media giants with increasing power and influence over human minds, and their collaboration with other TNCs, driven by mutual interest of the two, has profoundly intensified TNCs’ influence. The process has evolved and developed with modern ways and means that have added to its significance as well as its speed, scope and quantum. Given their huge capital resources and production capacities, TNCs are able to dictate their own terms in economic dealings. For the sale of their enormous production, TNCs require access to large markets; tariff issues, access restrictions and similar “barriers to trade” are hurdles in this access. What TNCs need is a global system for the free flow of their goods. They therefore use their economic power to influence international trade

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